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Advice from "Wealth Coach" - Suspicious, or Good?

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MachineEarning

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Last week I had my first call with a wealth coach and I'm not sure that all of their advice is good. He said that I needed an umbrella policy of $2,000,000. To get this, I need to increase my deductibles on auto and homeowners insurance. I am skeptical of following all of his advice because they make a commission off of insurance sales and so they want me to be as "protected as possible". Their other advice seems good regarding getting health insurance, setting up a power of attorney, getting disability insurance, and paying off my high interest car loan this month.

It's like investing where you can have a covered position.

We had an hour call where they showed me net worth projections like MJ does in TMF .
 

MJ DeMarco

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Last week I had my first call with a wealth coach and I'm not sure that all of their advice is good. He said that I needed an umbrella policy of $2,000,000. To get this, I need to increase my deductibles on auto and homeowners insurance. I am skeptical of following all of his advice because they make a commission off of insurance sales and so they want me to be as "protected as possible". Their other advice seems good regarding getting health insurance, setting up a power of attorney, getting disability insurance, and paying off my high interest car loan this month.

It's like investing where you can have a covered position.

We had an hour call where they showed me net worth projections like MJ does in TMF .

Is someone who calls themself a "wealth coach" have a least an 8-figure net worth? Someone coaching on wealth should be wealthy.

As for the insurance, that is suspicious that he gets commissions from his recommendations. He doesn't sound like a fiduciary.

If you have no wealth, recommending an umbrella policy tells me the guy is probably full of shit.

If you have substantial wealth built, then yes, by all means, have an umbrella policy. But if you have a negative net worth, an umbrella policy would be the least of my concerns.
 

OleksiyRybakov

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Is someone who calls themself a "wealth coach" have a least an 8-figure net worth? Someone coaching on wealth should be wealthy.
Why is it important that a wealth coach is really wealthy? Lothar Matthäus was a way more successful football / soccer player than Jürgen Klopp. However, when it came to coaching, Klopp outperformed Matthäus by far. So maybe it is better to take Klopp's advice if I wanted to become a better football player. In my opinion it is more important to analyze the advice and I would not exclude a great advisor just because they are not rich. In my opinion, my coach should make me rich and not necessarily themselves.

But I agree that if someone gets rich from a course or umbrella policy they sell, most likely they are scammers.
 

GeoffP

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Last week I had my first call with a wealth coach and I'm not sure that all of their advice is good. He said that I needed an umbrella policy of $2,000,000. To get this, I need to increase my deductibles on auto and homeowners insurance. I am skeptical of following all of his advice because they make a commission off of insurance sales and so they want me to be as "protected as possible". Their other advice seems good regarding getting health insurance, setting up a power of attorney, getting disability insurance, and paying off my high interest car loan this month.

It's like investing where you can have a covered position.

We had an hour call where they showed me net worth projections like MJ does in TMF .
What was the basis for the recommendation? Professional licensure? Business ownership? Penchant for doing science experiments in your backyard? Ownership of dangerous/venomous animals?
 

MachineEarning

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What was the basis for the recommendation? Professional licensure? Business ownership? Penchant for doing science experiments in your backyard? Ownership of dangerous/venomous animals?
Great question! He said that if I was in a car accident with a Porsche that my insurance could not cover the cost and so people could take my business in a law suit. My deductible covers $100,000 for bodily injury.

I don't run weird science experiments. I'm a safe driver. I live in a low crime area. No pets.
 

MachineEarning

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Is someone who calls themself a "wealth coach" have a least an 8-figure net worth? Someone coaching on wealth should be wealthy.

As for the insurance, that is suspicious that he gets commissions from his recommendations. He doesn't sound like a fiduciary.

If you have no wealth, recommending an umbrella policy tells me the guy is probably full of shit.

If you have substantial wealth built, then yes, by all means, have an umbrella policy. But if you have a negative net worth, an umbrella policy would be the least of my concerns.
Wow. Awesome response. This is why this forum is so helpful!

No. He's not wealthy based on his facebook profile photo. He has credentials from FINRA, RICP and CExP and 8 years of experience as a wealth advisor but he still could be living in the "slow lane".

I don't have a high net worth yet and so I'm not going to buy the umbrella policy.

Thanks, @MJ
 

MachineEarning

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Why is it important that a wealth coach is really wealthy? Lothar Matthäus was a way more successful football / soccer player than Jürgen Klopp. However, when it came to coaching, Klopp outperformed Matthäus by far. So maybe it is better to take Klopp's advice if I wanted to become a better football player. In my opinion it is more important to analyze the advice and I would not exclude a great advisor just because they are not rich. In my opinion, my coach should make me rich and not necessarily themselves.

But I agree that if someone gets rich from a course or umbrella policy they sell, most likely they are scammers.
@OleksiyRybakov, read The Millionaire Fastlane again to understand this.

The same logic applies to wealth coaching as it does to fitness. My personal trainer is a beast. He's really strong and so I can trust him to give me good advice for power lifting. The same idea applies to wealth. If someone can't hold themselves accountable for being healthy, then why should I trust them to hold me accountable?
 

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Great question! He said that if I was in a car accident with a Porsche that my insurance could not cover the cost and so people could take my business in a law suit. My deductible covers $100,000 for bodily injury.

I don't run weird science experiments. I'm a safe driver. I live in a low crime area. No pets.
Is your business something that could be performed without you or that has valuable stuff?

Do you live in an area with a high number of valuable cars?

You may want to boost your property damage limit on your auto insurance if it's not at least $50,000. Also, there is some personal liability coverage on a homeowner's or renter's policy. It's usually pretty cheap to boost that if it isn't at least $250,000.

You should probably take the opportunity to have a licensed business insurance broker look at your business insurance coverage if you haven't already. Most basic policies are deficient in the digital age.
 

MJ DeMarco

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Why is it important that a wealth coach is really wealthy?

Because nothing physical and/or genetic should stop them from being wealthy... all they have to do is follow their own advice, eh?

Unlike a pro sports coach, sometimes injuries, genetic limitations, and other "uncontrollable" factors can retire a promising athlete or prevent them from reaching the pinnacle of their game, compelling them to coach.

The same dichotomy works for fitness coaches. Sorry, but I'm not taking fitness advice from a fat slob who can't climb a flight of stairs. Nothing should stop them from taking their own advice and being a model of their words. Same goes for finances.

A wealth coach is apples, a golf coach is oranges.

I don't have a high net worth yet and so I'm not going to buy the umbrella policy.

I'm not advising you one way or another, just speaking from personal experience. I have an umbrella, as I also have max liability on my autos. Of course, it wasn't like that when I was struggling hand to mouth.
 

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Why is it important that a wealth coach is really wealthy? Lothar Matthäus was a way more successful football / soccer player than Jürgen Klopp. However, when it came to coaching, Klopp outperformed Matthäus by far. So maybe it is better to take Klopp's advice if I wanted to become a better football player. In my opinion it is more important to analyze the advice and I would not exclude a great advisor just because they are not rich. In my opinion, my coach should make me rich and not necessarily themselves.

But I agree that if someone gets rich from a course or umbrella policy they sell, most likely they are scammers.
It’s important because a sports coach is coaching a physical ability and performance is very age and athletically related.

Would you take coaching advice for chess if your mentor couldn’t beat you in chess?

If I’m worth $10m should I take advice from someone worth $500k? Assuming he is the same age or older than me?

It’s the same with wealth and money making. Your mentor or coach isn’t limited by his age or physical abilities. So if he is not wealthy, why would he be able to coach you?
 

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Great question! He said that if I was in a car accident with a Porsche that my insurance could not cover the cost and so people could take my business in a law suit. My deductible covers $100,000 for bodily injury.

I don't run weird science experiments. I'm a safe driver. I live in a low crime area. No pets.

If your net worth is not over $1m, you don’t need $2m umbrella policy. Think about what would happen if you were in an accident. Your insurance company would pay out its max. Then they would decide whether or not to sue you. If you have no money, they would just quit. But if they find out you have a $2m policy, you bet they are coming after you for more.
 

OleksiyRybakov

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If a millionaire recommends to not listen to advice of "wealth coaches" that do not have a fortune of at least 8 figures, can it be because that millionaire does not want to lose their own customers?

If a non-millionaire recommends to listen to everyone but pay more attention to the advice themselves rather than who is giving the advice, can it be because that person does not want to lose their own customers?

I am not a millionaire and my networth is five to six figures. I have only discovered TMF two months ago. And I am giving financial "advice" based on TMF . Also, I recommend to consider cryptocurrency and talk about IT. The reason why I am not rich is because implementing my advice for myself is complex and I am at the beginning of my journey. So obviously, my opinion on financial coaches is biased unless I manage to become wealthy and to repeat the same words.

I also remember that in March 2020 a colleague of mine advised me to invest more money while the price was low. I guess that he was not richer than me at that point since he was a student. I did not follow his advice and lost an opportunity to make more money. So if you ask me if I would listen to someone with a networth of maybe four figures I would say that I would but I would analyze the advice first.
 

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If a millionaire recommends to not listen to advice of "wealth coaches" that do not have a fortune of at least 8 figures, can it be because that millionaire does not want to lose their own customers?

If a non-millionaire recommends to listen to everyone but pay more attention to the advice themselves rather than who is giving the advice, can it be because that person does not want to lose their own customers?

I am not a millionaire and my networth is five to six figures. I have only discovered TMF two months ago. And I am giving financial "advice" based on TMF. Also, I recommend to consider cryptocurrency and talk about IT. The reason why I am not rich is because implementing my advice for myself is complex and I am at the beginning of my journey. So obviously, my opinion on financial coaches is biased unless I manage to become wealthy and to repeat the same words.

I also remember that in March 2020 a colleague of mine advised me to invest more money while the price was low. I guess that he was not richer than me at that point since he was a student. I did not follow his advice and lost an opportunity to make more money. So if you ask me if I would listen to someone with a networth of maybe four figures I would say that I would but I would analyze the advice first.

I know you seem like a motivated and smart person. So take my comment as one that’s meant to help you (not discourage you), ok?

There is a zero chance of me listening to your financial advice. or anyone like you, meaning someone who just read a book and is now preaching. That’s why in your introduction I’ve asked you how are you planning to make it work?

it’s not personal, and I’ll go one step further. I did NOT take what MJ writes as gospel either. But the more I learn about HOW the principles came about for MJ (experience, research, real life hard lessons), the more I’m willing to try. And only after I’ve tested what he shares do I become a “believer”. And his personal business success is a factor! A big one.

He’s not writing to make money, so I can trust his motives. Writing is a hobby for MJ.

And people already said above. I’m not taking advice from a fat personal trainer (even if he read a book lol), it would seem ridiculous.

You too, should do the same. Don’t blindly trust - test, adjust, apply, test again and so on.
 

Kevin88660

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Last week I had my first call with a wealth coach and I'm not sure that all of their advice is good. He said that I needed an umbrella policy of $2,000,000. To get this, I need to increase my deductibles on auto and homeowners insurance. I am skeptical of following all of his advice because they make a commission off of insurance sales and so they want me to be as "protected as possible". Their other advice seems good regarding getting health insurance, setting up a power of attorney, getting disability insurance, and paying off my high interest car loan this month.

It's like investing where you can have a covered position.

We had an hour call where they showed me net worth projections like MJ does in TMF.
If you do not trust his opinion you can always get a second opinion. But these recommendation are usually highly dependent on your current financial circumstances and financial goals.

You can always protect yourself incrementally as you study and become more educated on such topics. This prevents yourself from getting financially committed too much into plans and then you have a change of plan/belief/opinion on where you should be going.
 
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thechosen1

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If a millionaire recommends to not listen to advice of "wealth coaches" that do not have a fortune of at least 8 figures, can it be because that millionaire does not want to lose their own customers?

If a non-millionaire recommends to listen to everyone but pay more attention to the advice themselves rather than who is giving the advice, can it be because that person does not want to lose their own customers?

I am not a millionaire and my networth is five to six figures. I have only discovered TMF two months ago. And I am giving financial "advice" based on TMF. Also, I recommend to consider cryptocurrency and talk about IT. The reason why I am not rich is because implementing my advice for myself is complex and I am at the beginning of my journey. So obviously, my opinion on financial coaches is biased unless I manage to become wealthy and to repeat the same words.

I also remember that in March 2020 a colleague of mine advised me to invest more money while the price was low. I guess that he was not richer than me at that point since he was a student. I did not follow his advice and lost an opportunity to make more money. So if you ask me if I would listen to someone with a networth of maybe four figures I would say that I would but I would analyze the advice first.

The idea of a wealth coach who is not wealthy just plays into one of several factors that should indicate a red flag.

Good ideas can come from anywhere (determining if an idea is good is not simple though) - but that's very different from signing up for a paid course or worse, giving someone an annual commission managing your money/investments for you.

In this case, the insurance thing is a dead giveaway: it doesn't even make mathematical sense for you to get such a policy.
 

Kevin88660

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Why is it important that a wealth coach is really wealthy? Lothar Matthäus was a way more successful football / soccer player than Jürgen Klopp. However, when it came to coaching, Klopp outperformed Matthäus by far. So maybe it is better to take Klopp's advice if I wanted to become a better football player. In my opinion it is more important to analyze the advice and I would not exclude a great advisor just because they are not rich. In my opinion, my coach should make me rich and not necessarily themselves.

But I agree that if someone gets rich from a course or umbrella policy they sell, most likely they are scammers.
"Wealth Coach" are really "bad titles" to begin with. Expertise are good when it is narrow(medical or digital marketing for example). You definitely should consider advice of others who have done similar things before. No one in the world can really tell you confidently what business you should start right now. When things get general no one can totally outsmart themselves by seeking advice from others. So there is no shortcut other than relentless learning and apply to our own circumstances.
 

GeoffP

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If your net worth is not over $1m, you don’t need $2m umbrella policy. Think about what would happen if you were in an accident. Your insurance company would pay out its max. Then they would decide whether or not to sue you. If you have no money, they would just quit. But if they find out you have a $2m policy, you bet they are coming after you for more.
Exception to this rule would be if he has a professional license that has high earning potential.... otherwise I'd agree.
 

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Great question! He said that if I was in a car accident with a Porsche that my insurance could not cover the cost and so people could take my business in a law suit. My deductible covers $100,000 for bodily injury.

I don't run weird science experiments. I'm a safe driver. I live in a low crime area. No pets.
An insurance agent isn't a 'wealth coach'. If insurance is the source of 8+ figure wealth from which comes his authority on the subject, that's fine. But selling a policy to someone is not the same as helping them increase their wealth. I'm going to take a shot in the dark and guess that a pitch for a universal life policy is coming next?

As for the advice... umbrella policies are cheap if you have the assets to need them. My personal umbrella costs less than $700 per year. The business ones are more, but that depends on the business. So it's not like the umbrella policy is bad advice necessarily, it's just that it's not 'wealth coaching.'

Puts on insurance hat. Porsch or no, if you have assets to go after, there are plenty of scenarios where you're better off having the limits. An often overlooked example is business interruption. Let's say you lose control of your vehicle, and run over a public utility. Nearby shopping centers lose power, water, Internet, or other services. For whatever reason, it takes the utility company a week to fully restore service. Not only are you responsible for the damage to the utility equipment, but every affected business (really, their insurance company), can sue you to reimburse their business interruption claims. So this is an example of why I personally keep umbrella limits.

Note on terminology: I think you meant your bodily injury liability, "Coverage A" on your auto policy, covers 100,000. A deductible is something that's paid out of your pocket, not by the insurance company.

Really? No weird science experiments? You should try some!
 

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I don't care if he's rich or not.

If you are going to call yourself a 'wealth coach' the only way you made your money was through 'coaching'.

Same reason I'm never listening to Dave Ramsey. Dave is rich but you will not become like him from listening to him.

There is a giant difference between 'being absorbent to the knowledge around you' and 'getting a wealth coach'. Everyone has something to learn, but you probably aren't going to learn it from this guy. The successful business people that actually accomplish something DON'T hire wealth coaches.

I would not treat this the same as getting a tennis coach. There's a process for learning a sport and it can be handed down and taught to lots of people and everyone can follow it. When you do that with wealth, the advice becomes SLOWLANE. It's taught for 'lowest common denominator' types of people and likely assumes you have weak a$$ goals. A wealth coach is not going to set you up with a scalable business that makes you 4 million a year.

This dude sounds like a bullshitter. The first thing he says is to buy insurance he gets a cut out of? f*ck that guy.

"Hey guys I hired a chef and he said we need to buy a 50 years supply of ketchup, don't know why. He suggested I buy his personal brand of ketchup. Should I?"
 

OleksiyRybakov

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I don't care if he's rich or not.

If you are going to call yourself a 'wealth coach' the only way you made your money was through 'coaching'.

Same reason I'm never listening to Dave Ramsey. Dave is rich but you will not become like him from listening to him.

There is a giant difference between 'being absorbent to the knowledge around you' and 'getting a wealth coach'. Everyone has something to learn, but you probably aren't going to learn it from this guy. The successful business people that actually accomplish something DON'T hire wealth coaches.

I would not treat this the same as getting a tennis coach. There's a process for learning a sport and it can be handed down and taught to lots of people and everyone can follow it. When you do that with wealth, the advice becomes SLOWLANE. It's taught for 'lowest common denominator' types of people and likely assumes you have weak a$$ goals. A wealth coach is not going to set you up with a scalable business that makes you 4 million a year.

This dude sounds like a bullshitter. The first thing he says is to buy insurance he gets a cut out of? f*ck that guy.

"Hey guys I hired a chef and he said we need to buy a 50 years supply of ketchup, don't know why. He suggested I buy his personal brand of ketchup. Should I?"
I agree on that opinion. This dude seems like a scammer. I would also never hire a wealth coach as well just like I would not hire a teacher to explain me first-grade math. I think that I can figure it out on my own. Are there people out there who can't? Well, there are people who cannot compute the profit from an investment. Computations like 90-80+70-60 are evaluated to 0, 10, 20 or 30 depending on the person. People do not even know how to invest. Can't they just Google it? How can those people understand exponential growth? How are they able to even understand compound interest? I don't even talk about questioning it.

And since the coaches know that lots of people in their TAM are actually on a low level, there is no reason for them to bother about teaching them complicated things. This is the reason why scam actually exists. When trying to bring people out of their comfort zone, 99% would hate it. Keep them happy and they keep you rich. But I do not want that. A majority of stupid people can elect populists that could ruin my country and lots of lives. This is the reason why I think that it is important to educate people correctly.
 

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